Making wilful blindness a criminal offence

A drug dealer gets caught in a police sting and is slapped in jail. Better still – his or her financiers and accountants get charged with money-laundering, and are packed off in disgrace too. Justice is done. Rightly so.

But the story doesn’t end there.

The drugs money laundering industry is part of a much bigger picture. It is dwarfed by another: the tax evasion industry.

Now here’s the rub. The drug money launderers and the tax evaders use exactly the same tax haven scams and tricks as each other. Money laundering and tax evasion are two rails on the very same tracks through the global financial system.

But the world has decided to tackle one – and not the other. It has made drugs trafficking a money laundering offence: if you are a financer or accountant or banker and get caught helping a drugs trafficker, you may well go to jail too.

But not tax evasion. Even though tax evasion a criminal offence in most countries, it isn’t a money-laundering offence. Tax evaders go to jail. But the wealthy tax haven accountants, lawyers and bankers who helped them commit these crimes? They walk free.

The money-launderers and their financiers almost never get caught – there is a failure rate of 99 percent, by some estimates. That’s because we haven’t got serious about tax havens, or about tax evasion.

It is time for this to change.

Make ‘wilful blindness’ a criminal offence

Turning a blind eye to tax evasion – asking no questions of your clients – is not ok.

We can bring hard penalties against the pinstripe intermediaries who help the tax evaders.

The IMF and other bodies dealing with money-laundering must officially make turning a blind eye to tax evasion a money-laundering offence.

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We are an independent international network launched in 2003. We conduct high-level research, analysis and advocacy on international tax; on the international aspects of financial regulation; on the role of tax in society; and on the impacts of tax evasion, tax avoidance, tax 'competition' and tax havens. We seek to create understanding and debate, and to promote reform, especially in poorer countries. We are not aligned to any political party.